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Politics. Again. Sad.

28 Jul 2017, 08:00 | Posted by: Paul Donovan | Tags: Paul Donovan

The US Senate has passed sanctions against Russia. US President Trump has been unclear about whether they will be signed into law. The Germans are not happy about the scope of the sanctions. The US Senate failed to pass healthcare reform, confirming Trump's assertion that "healthcare is complicated".

The new White House communications chief demonstrated the extent of his communication skills with a profanity-laden interview attacking two senior colleagues. For international investors, the combination of legislative failure and open conflict in the executive branch is likely to assume exaggerated importance. It is the currency markets that are most exposed to this.

Preliminary US GDP is due, but the data will be revised extensively in the coming months as it contains only around 40% of the information used to calculate the final GDP. The mass of evidence suggests the economy is operating about trend growth.

Japanese consumer price inflation was relatively unexceptional, with unemployment falling but retail sales a little softer than had been hoped. Eurozone consumer price inflation (preliminary data) is due, and seen as critical to the timing of ECB policy changes.